TPP in Focus: The Environment – The Need for Strong Commitments

Mar 31, 2015

This blog post is part of a series about the Trans-Pacific Partnership trade agreement.

The TPP negotiations provide a critical opportunity to raise environmental standards among countries that account for nearly 40% of the world economy. But if not done effectively, TPP risks locking in weak environmental standards that will be even more difficult to strengthen in the future. After the U.S. lowers its tariffs, the country will no longer hold the leverage it does at this moment to bring about lasting change far above the status quo. 

With the environmental provisions still unresolved in TPP, it is vital that the United States push for strong commitments and full enforceability.

Environmental provisions in trade agreements serve the dual purpose of protecting the environment and ensuring that trade does not result in a “race to the bottom” in which U.S. workers and businesses are forced to compete on an unlevel playing field. 

History: NAFTA Provisions Not Enforceable

The environment provision included in the North American Free Trade Agreement was based on a country’s own laws and was not enforceable through the dispute settlement mechanism applicable to other chapters. Further, it was not incorporated into the agreement itself but rather was included in a side agreement.

Breakthrough: “May 10 Agreement” Includes Enforceable Provisions in 2007

In what has become known as the “May 10 Agreement,” our pending trade agreements with Peru, Colombia, Panama and South Korea were changed to provide strong environmental provisions. These provisions crafted by House Democrats and accepted by the Bush Administration were fully enforceable through the dispute settlement mechanism just like all other provisions in the agreement. 

Specifically, those four trade agreements contain important substantive disciplines. Seven core multilateral environmental agreements, including the Convention on International Trade in Endangered Species, became directly enforceable through the agreement. Parties also committed to enforce their environmental laws and to not waive or derogate from those laws for the purpose of promoting trade and investment. 

Additional Obligation for Peru to Address Illegal Logging

In the case of Peru, and given the universal recognition of the importance of thwarting further deforestation of the Amazon, the agreement also included language to strengthen Peru’s forestry regime, with the ultimate goal of eliminating illegal logging.

Unfortunately, Peru has recently taken steps to limit environmental protections in an effort to attract investment. The situation will need to be closely monitored to ensure that Peru meets its existing obligations, and does not take any additional steps to limit environmental protections.

The Trans Pacific Partnership:  A Unique Opportunity

In negotiating the Trans-Pacific Partnership, there are obvious challenges unique to the region. Whaling and the unconscionable practice of finning a shark – and tossing the finless animals back in the water to drown – come to mind immediately. And some of the parties at the table are known hot spots for trade in illegally harvested goods. In addition to Peru’s history of illegal logging, Malaysia and Singapore are notorious transshipment points for illegal take and trade with China – which may seek to join TPP in the future – a key destination and a major part of the problem.

Proceeds from illegal take and trade of wildlife are used to fund international criminal activity, from terrorists to drug traffickers. As the President explained in a 2013 Executive Order, illegal wildlife trafficking represents an “international crisis that continues to escalate. Poaching operations have expanded beyond small-scale, opportunistic actions to coordinate slaughter commissioned by armed and organized criminal syndicates.” The President stated the need to “encourage the development and enforcement by foreign nations of effective laws to prohibit” illegal take and trade.

The United States presented a “Green Paper” in 2011 that outlined the U.S. vision for the TPP environmental chapter. That paper  included the provisions from the May 10 Agreement of 2007, and it also proposed requiring TPP parties to prohibit illegal take and trade as well as certain fishing subsidies that contribute to overfishing. 

Other countries had ideas of their own, including climate change given that the United States has signed and ratified the United Nations Framework Convention on Climate Change, and fears over “carbon leakage” through trade have discouraged individual countries, including the United States, from taking action.

A leaked text from November 24, 2013, indicates a broad range of very important subjects will be covered, ranging from the illegal take and trade of fauna and flora, to fish subsidies, whaling, and shark finning. But some proposed commitments are not framed strongly enough. They are framed in terms such as “endeavor,” “seek,” or “strive;” they simply “recognize” or “acknowledge” problems without any accompanying obligation to guarantee action to address those problems; or they provide for parties to “take measures” without specifying what those measures are.

In assessing whether the agreement has achieved a level of environmental protection at least as high as the level achieved in the May 10 Agreement, the scope of issues covered will be important – but so will the strength of the obligations relating to those issues. 

It is important to recognize that measures to protect the environment in other countries have sometimes run afoul of the investment obligations in our trade agreements, as enforced through the investor-state dispute settlement mechanism (ISDS). As use of ISDS has increased, particularly recently, major problems with the mechanism have become more apparent. These problems need to be addressed.

The TPP agreement could meet or exceed the May 10 standard if the outstanding issues are resolved effectively. For example, the U.S. Green Paper’s proposal to “prohibit” illegal take and trade, as well as fish subsidies, would be important steps in that direction. The leaked text suggests that there is much work to be done in both of those areas. Moreover, the leaked text also indicates that parties are merely obligated to “promote” long-term conservation of sharks and whales. It would be at best a disappointment if the parties failed to achieve meaningful disciplines with respect to two problems endemic to the region.

As USTR continues negotiations to address these questions, Congress and other interested groups must be actively involved.

It is worth remembering that the model for a prohibition on trade in illegally taken wildlife and plants is a U.S. law that was written by a Republican Congressman, John F. Lacey of Iowa, and signed by Republican President William McKinley in 1900 (the Lacey Act). 

And, according to a 2005 study by the University of Maryland’s Program on International Policy Attitudes (PIPA) and Knowledge Networks, there is broad, bipartisan public support for environmental protections in trade agreements:

Ninety-three percent endorsed the view that “countries that are part of international trade agreements should be required to maintain minimum standards for protection of the environment.” There were no significant differences between Republicans (92%) and Democrats (94%).

A TPP Agreement that includes strong and enforceable environmental protections is one that reflects American values – values that the vast majority of citizens in other TPP countries surely share.

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114th Congress